December 7, 2023

United States Mint Bullion Program Net Margin Remains at 1.9%

Amidst increased demand for physical gold and silver investment products, the United States Mint achieved record revenue from the sale of bullion coins during their 2010 fiscal year. Annual sales totaled $2.86 billion, which yielded net income of $55.2 million for the segment.

The US Mint produces gold, silver, and platinum bullion coins which are distributed through a network of authorized purchasers. The various programs were authorized by Congress, and the weight, content, and purity of each bullion coin is guaranteed by the U.S. government.

During the fiscal year ending September 30, 2010, the US Mint issued one ounce American Silver Eagles; one ounce, half ounce, quarter ounce, and tenth ounce American Gold Eagles; and one ounce American Gold Buffalo coins. The American Platinum Eagle, which is typically produced in four different bullion weights, was not produced or issued during the year.

Because the purpose of the US Mint’s bullion coin programs is to provide investors with a convenient and cost effective method for investing in precious metals, the programs are managed to a nominal net margin. The bullion coins are sold to authorized purchasers based on the current market price of the metal plus a fixed or percentage mark up to cover minting, distribution, and marketing costs, as well as a net margin targeted at or below 2%. For the past three years, the net margin has remained steady at 1.9%.

The US Mint utilizes a hedging program to avoid the risk related to fluctuations in silver costs. Silver is purchased in large quantities on the open market and then an interest in that silver is sold to a trading partner. The US Mint maintains physical custody and title to the silver. As finished silver bullion coins are sold to authorized purchasers, the trading partner’s interest is repurchased. Transaction fees related to the hedging program were $170,000 for the 2010 fiscal year.


  1. The following is a quote from the Mint’s annual report. It seems to me the Mint is saying costs were allocated on a percentage of revenue basis instead of whether or not those costs were actually associated with the bullion programs. If the costs are not actually allocated based on the reason they were incurred, the claim of successful management to just under a 2% net margin for the bullion program for the third year seems a little artificial.

    “Bullion sales generated the largest portion of the United States Mint’s total revenue. Consequently, a greater portion of sales, general and administrative (SG&A) expense was allocated to the bullion program in FY 2010. Bullion SG&A increased to $21.8 million in FY 2010 from $12.1 million last year. Bullion net income increased 68.8 percent to $55.2 million in FY 2010 from $32.7 million in FY 2009. The bullion program was successfully managed to just below the standard net margin of two percent.”

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